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Geopolitical risk & inflation highlighted as top risks to the financial industry in 2023

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According to new DTCC survey

Annual Systemic Risk Barometer Survey identifies top areas of concern in the financial marketplace

New York/London/Hong Kong/Singapore/Sydney, December, 2022 ‒ The Depository Trust & Clearing Corporation (DTCC), the premier post-trade market infrastructure for the global financial services, today issued its annual Systemic Risk Barometer Survey results, which identified Geopolitical Risks & Trade Tensions, Inflation and Cyber Risk as the most significant threats to the financial services ecosystem in the coming year.

Specifically, 68% of survey respondents cited Geopolitical Risks & Trade Tensions as a top threat, up from 49% last year, as tensions around the world continue to impact global markets. 61% of survey respondents identified Inflation as a top threat, up from 34% last year, which represents the most significant jump across all risks. Respondents cited unknowns around how long inflationary pressures may last, as well as the impact of monetary policy and supply chains as key reasons behind their concerns. 47% of respondents ranked Cyber Risk as a top risk, a decrease from 59% last year, driven by the growing sophistication of threat actors, the proliferation of new technology adoption and an increasingly interconnected marketplace.

“The dramatic increase in concerns around Geopolitical Risks & Trade Tensions, Inflation and U.S. Economic Slowdown reinforce how quickly the threat landscape evolves and the importance of regularly monitoring the external environment to gain intelligence into potential shocks to market stability,” said Michael Leibrock, Chief Systemic Risk Officer at DTCC. “As a result, firms must continually review their risk management practices and procedures, conduct scenario planning exercises and ensure their operating structure is nimble to protect themselves and the broader industry.”

Nearly three years since the start of the pandemic, most respondents no longer consider COVID-19 a top threat to the industry, as case numbers decline, and vaccine availability continues to increase.

“The results of our latest survey provide important insights for DTCC and our clients to engage in industry-wide discussions on opportunities to share best practices and partner on ways to mitigate risk,” said Adrien Vanderlinden, DTCC Systemic Risk Executive.

DTCC conducts its Systemic Risk Barometer survey each year, with its last survey, the 2022 Risk Forecast, published in December 2021.

About DTCC

With over 45 years of experience, DTCC is the premier post-trade market infrastructure for the global financial services industry. From 21 locations around the world, DTCC, through its subsidiaries, automates, centralizes, and standardizes the processing of financial transactions, mitigating risk, increasing transparency and driving efficiency for thousands of broker/dealers, custodian banks and asset managers. Industry owned and governed, the firm simplifies the complexities of clearing, settlement, asset servicing, data management, data reporting and information services across asset classes, bringing increased security and soundness to financial markets. In 2021, DTCC’s subsidiaries processed securities transactions valued at nearly U.S. $2.4 quadrillion. Its depository provides custody and asset servicing for securities issues from 177 countries and territories valued at U.S. $87.1 trillion. DTCC’s Global Trade Repository service, through locally registered, licensed, or approved trade repositories, processes 16 billion messages annually.

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